1. Decide to Buy
Although there may be many good reasons for you to buy a home, wealth building ranks near or at the top of the list. Home ownership is likely the very best investment most people will ever make.
2.Hire your Agent
We have already talked about the role of a Realtor® in buying a home but it is worth it to say, once again, that a real estate agent brings with him a wealth of knowledge, experience and contacts – and costs the buyer NOTHING. It is the responsibility of your real estate agent to expertly co-ordinate all the professionals involved in your home purchase and to act as the advocate for you and your interests.
3. Secure Financing
While you may be excited about the idea of owning a home, the thought of taking on a large mortgage is likely somewhat frightening. Many first-time buyers have no idea how mortgages work or how to obtain one. Once you have decided to buy a home, it is an excellent idea to get pre-qualified or pre-approved for a mortgage. In doing this you know exactly how much money you have to spend and won’t waste time looking at houses you can’t afford to buy.
4. Find Your Home
Jumping in your car and driving around town looking for For Sale signs is one way and it may be fun for a short period of time. Looking for your home should begin with carefully assessing your values, wants and needs, both for the short and long terms. Where do you want to live? How much space do you really need? If you have several criteria on your wish list, how do they rank in priority sequence? Are you interested in a fixer-upper? Are you looking for a freehold or a condominium? Do you want new home construction or a resale? What features and amenities do you want and which do you really need?
5. Make an Offer
Now that you have found the home you want, you must leave the dreamer behind and become a business person. Your agent becomes critical to the success of the transaction at this point. The three basic components of an offer are price, terms and conditions.
6. Perform Due Diligence
Unlike many major purchases, once you buy a home you can’t return it if something breaks or doesn’t quite work the way it is supposed to. That’s why home owner’s insurance and property inspections are so important. A home owner’s insurance policy protects you against loss or damage to the property itself and also liability in case someone is injured while on your property. A home inspection should expose the “secret issues” a home might hide so you know exactly what you are getting into before you sign your closing papers. Don’t sweat the small stuff – things that can be easily fixed. If a big problem is discovered, bring in a specialist. If the worst-case scenario turns out to be true, you might want to walk away from the deal.
The final stage in the process is the lender’s confirmation of the home’s value and legal statue, and your continued credit-worthiness. This could entail a survey, appraisal, title search, and a final check of your credit. Your agent will keep you posted on how things are going, but your work is pretty much done. You have to keep in touch with your agent, obtain the funds needed, perhaps conduct a final walk-through and work with your lawyer on the documentation. On closing day, you will sign documents that finalize your mortgage, pay the seller, pay your closing costs, and transfer the title from the seller to you.
8. Protect your Investment
You have probably gotten to know your real estate agent pretty well by now and there is no reason to throw all the trust and rapport out the window just because the deal has closed. Your agent will want to keep in touch with you and can still help you with such things as your first tax return as finding contractors to help with repairs or renovations, provide contacts for home insurance, help your friends purchase their homes and keep track of your home’s market value. Attending to your home’s maintenance is essential to protect the long-term value of your investment. Keep it clean – perform routine maintenance on your home’s systems and watch for signs of problems – leaks, damage and wear. Fixing small problems early can save you big money later on.